October 25, 2011 by Shawn Smith
Q: Hi Shawn. As a psychologist myself, I’m wrestling with whether to work with an increasing number of patients asking me to accept reduced fees. With the bad economy, more people want sliding-scale services. The problem is that the more sliding-scale work I do, the more hours I have to put in to pay the bills. It’s tiring. Just wondering how you approach the problem. – Michelle
Dear Dr. Michelle,
For those unfamiliar with the term, a sliding-scale fee structure is a variable rate based on a person’s ability to pay for a product or service. People of means pay the full fee, while those with financial difficulties pay less for the same service. While I think they’re nice in theory, sliding scales come with some hefty trade-offs for both therapist and client.
You and I know, Michelle, that we psychologists hate to talk about money. It is one of the only consistently taboo subjects in therapy. While we welcome the most ghastly details of life, we avoid this topic like a politician avoids the confession booth.
In a 1996 study (an old study but one of the most recent since we avoid discussions of money even in our own professional literature) Catherine Keuffel found that we shrinks avoid the topic of payment because we tie it to our own insecurities. Those fears include potential conflict with the client, questions of self-worth, uncertainties about the definition of the service we provide, and other bits of neuroticism. I’ll admit to some anxiety about posting this essay for fear of looking like the Grinch.
Our reticence on the matter is just plain wimpy since we ask our clients to face their own insecurities. So in the spirit of chipping away at a needless taboo I’ll share my opinion on sliding scales. I hope you don’t mind a cold and unsentimental discussion that runs contrary to our therapy training.
Psychologists are taught that it is our moral responsibility to work for little or nothing at least part of the time. The APA’s code of ethics instructs psychologist to “strive to contribute a portion of their professional time for little or no compensation or personal advantage.”
Unfortunately, the APA doesn’t explain who should pay the costs associated with treatment, how to monitor the effects of charity, or how to implement a fair fee structure. Being well-intentioned people, they probably assume that their call to altruism needs no explanation, but actions of the heart can have unintended consequences. While sliding scales can feel good – and in fact they may be good – they can also be philosophically and pragmatically troublesome.
Psychologists who offer sliding scales should be perfectly clear with themselves and with their clients about who is paying for what. As is often the case with charitable acts, some unknowing third party can end up paying the bill. Worse still, charity sometimes achieves undesired ends.
Here are some reasons that psychologists should think carefully about sliding scales:
Sliding scales create a potential moral hazard.
Minimal or no payment insulates a client from the risk of losing his or her monetary investment. Clients who don’t pay are therefore less likely to treat the service respectfully or work hard for their desired outcome. People simply tend to devalue things for which they bear little responsibility. That is obviously not true for everyone, but it is true for humans in general.
Consider the manner in which people treat rental cars. I’ll admit that I’m a little less concerned about speed bumps when I’m driving a rental, and I’ve never changed the oil in a rented engine. Why should I? I have a negligible investment in the vehicle.
I believe that reduced fees should be reserved for people who are somehow invested in treatment. I realize that a minimal payment can represent a significant monetary investment for someone with limited resources. The point is that investment in some form or another is necessary for good outcomes. The absence of investment is a recipe for resentment and wasted time.
I know whereof I speak, having worked in a prison where services are provided at no charge to the recipient. As you might imagine, those free services are treated with the respect befitting a rented Yugo while taxpayers foot the bill. Therein lies the moral hazard, which brings brings me to my next point:
Sliding scales can force one client unknowingly to subsidize another.
As you pointed out, Michelle, we psychologists must pay our bills. We have a finite number of hours in which to generate enough income to do so, and we don’t typically make a lot of money. If a psychologist charges someone a fee that is insufficient to cover the bills for that portion of time, then she must recover that loss from someone else.
This is where altruism and good intentions get complicated. It may feel good to donate services to a particular client, but the psychologist who does so may be overcharging others in order to pay for that charity. It can hardly be called altruistic to donate someone else’s money.
One clinic I’m aware of openly states that a certain percentage of payment from full-fee clients is used to subsidize reduced-fee clients. That seems a perfectly reasonable and ethical approach. The clinic is acknowledging that their prices are higher than they would be otherwise, and they are giving their full-fee clients the option of participating in a charitable act. Those clients can choose a different clinic if they wish to avoid the added expense.
Sliding scales turn psychologists into social engineers.
Sliding scales force a psychologist to decide who is worthy of special treatment, and who is unworthy. In private practice, where a clinician typically has no objective method of determining “worthiness,” the decision must ultimately rest on sloppy, emotional impulses: This person deserves it; that person does not. Ick.
To complicate things, the psychologist cannot be sure that the recipient of charity is the most deserving. I’ve seen cases in which relatively wealthy individuals finagle a reduced fee while everyone else pays the full fee.
To prevent that problem, some clinics devise semi-objective, progressive fee scales based on documentation of income. That is more consistent than gut impulse, but as a private practitioner I’m not about to begin tracking the income of my clients, nor am I willing to dabble in the ugly business of devising charts and fee scales that remain subjective at their core.
One of the reasons I will never run for public office is that I have no stomach for the partiality and nepotism that comes with it. I want no part of deciding who is worthy of special favors and who must suffer to pay for those favors. The very idea is repellant because it invariably involves stealing one person’s dignity and another person’s resources.
Does that mean that I oppose charity? Absolutely not. I’ll return to that topic shortly.
Sliding scales punish those who are willing to pay for the psychologist’s expertise and time, and they reward those who are unwilling to pay.
I realize this isn’t the intent of sliding scales, but it is on one of the effects, and it is the worst business model I’ve ever heard of. Other industries offer sliding scales, but I can’t think of any profession that supplicates itself like mental health professionals do. I can’t recall the last time a grocer, a plumber, or an accountant offered to take less money out of the goodness of his heart.
That’s not to say that their hearts aren’t good, but they may be operating under different assumptions. They may assume, for example, that catering to people who are unwilling to remunerate them would kill their business.
So how do we psychologists offer so much sliding-scale work and manage to stay afloat? We work longer hours and see extra patients. But that, too, can come with unintended costs paid by unconsenting others, which brings me to my next two points…
Sliding scales can force a clinician to work longer hours, which may reduce his or her effectiveness.
Psychology is tiring work, and psychologists are prone to burnout. Any clinician who works extra hours in order to offer reduced fees should, in my opinion, ensure that her clinical effectiveness does not suffer. Reduced effectiveness is essentially another subsidy paid by unconsenting clients who are paying the full fee and deserve our best performance.
Sliding scales can force the psychologist’s loved ones to subsidize treatment.
Because reduced-fee services can require longer hours, there may be less time and fewer emotional resources available to other important people in the psychologist’s life. Any psychologist with a sliding scale should ensure that his fee policy isn’t exacting added costs on loved ones who never agreed to the payment policy.
Having said all that, I think sliding scales are a fine idea. I am very aware that some financially strapped people are better served by private-practice psychologists than overwhelmed, underfunded clinics. And at the risk of sounding defensive, I have donated literally thousands of hours of my time to charitable causes.
But any psychologist who offers a sliding scale should guard against unintended consequences. Since you are searching for objective guidelines, Michelle, I think that sliding scales should meet the following criteria:
- The time and expertise that we donate must be our charitable contribution alone. We should not force clients to subsidize one another by way of money or reduced effectiveness.
- We should be mindful of the potential moral hazard inherent to sliding scales, and we should address the problem immediately if outcomes are in jeopardy.
- Our fee structure should not cause us to neglect loved ones or other important obligations.
- We should be be able to justify, if only to ourselves, our method of determining charitable worthiness.
As the APA demonstrates with its vague call to altruism, it is easy to submit to emotional sentiment, outcomes be damned. But of all people, we psychologists should obey two principles: that emotions shouldn’t rule behavior, and that forethought can prevent unwanted and unintended consequences.
Keuffel, C.R. (1996). The money metaphor: Therapists’ experience with fee transactions with their clients. Dissertation Abstracts International: Section B: The Sciences and Engineering, 57(5-B), 3413.